The distinguishing feature of the outer hair cells of the mammalian cochlea is to elongate and shorten at acoustic frequencies, when their intracellular potential is changed. This "electromotility" turns these cells into active devices that are able to amplify the sound-evoked mechanical responses of the organ of Corti. The cytosol of these cells is largely free of cytoskeletal elements and their cylindrical shape is maintained mainly by intracellular hydrostatic pressure (turgor), which makes the electromotility possible. We have now characterized the osmotic water permeability of outer hair cells and provided evidence that water is entering the cell through specialized water channels. These water channels were found to localize in the lateral plasma membrane where the outer hair cell "motor" proteins are located. Using electrophysiology measurements we showed that the expression of the water channels and the "motor" proteins occur simultaneously at the onset of high sensitivity hearing. In addition we found that water influx into the outer hair cell is regulated by intracellular voltage which may represent an important local feedback mechanism setting up the effectiveness of the OHC motor output. We also used a combination of electron microscopy techniques to describe novel properties of another key element in auditory and vestibular transduction, the tip link. The mechanism of transduction by hair cells is quite different from transduction in other well characterized sensory systems. Unlike visual and olfactory transduction, which rely on G-protein coupled enzyme amplification steps, the auditory and vestibular systems rely on a direct mechanical gating of the transduction channel. Although the tip link is almost certainly part of the mechanical chain that opens the transduction channel, it is less clear whether the tip link itself is the gating spring, the elastic element that stretches during hair-cell stimulation. Our structural experiments, better define the structure of the tip link -- a stiff structure made of a helical double filament with specialized membrane linker structures at either end-- and suggest that the gating spring instead lies in series with the helical segment of the tip link.